CONTINUED GROWTH, CHALLENGES LIE AHEAD FOR GRASS-FED BEEF

“Over the last almost 20 years now, the grass-fed sector has grown exponentially,” says industry veteran, Dr. Allen Williams… During those 20 years, he notes, he has seen industry retail sales grow from less than five million dollars per year in 1998 to more than 2.5 billion in 2013.

Planned Grazing: A Study Guide and Reference ManualAlthough I personally prefer the taste of grain finished beef (and nowadays, even most of it is too dry and or “chewey” for me), I am happy to see this. It demonstrates that the free market is not totally dead–at least not in the beef business. The market demands, producers answer. That is as it should be. — jtl, 419

by Jesse Bussard via Gallagher Animal Management

Grass Fed Beef

A Handbook for Ranch ManagersTwenty years ago, grass-fed beef was nothing more than a fledgling enterprise in the meat business. The term “grass-fed” had yet to reach mainstream usage and many retailers laughed at the idea of selling such a product. Fast forward to present day and one soon realizes this is no longer the case for this long-thought-of as “niche” sector of the beef industry.

Environmental & Natural Resource Economics: The Austrian View“Over the last almost 20 years now, the grass-fed sector has grown exponentially,” says industry veteran, Dr. Allen Williams.

Williams is founding partner and president of Livestock Management Consultants, LLC, a livestock industry consulting firm. He has been involved with the grass-fed beef movement since its early days and worked closely with some of the very first grass-fed branded beef programs, such as Tallgrass Beef. During those 20 years, he notes, he has seen industry retail sales grow from less than five million dollars per year in 1998 to more than 2.5 billion in 2013.

Combat Shooter's HandbookOnce made up of fewer than a hundred producers nationwide, the grass-fed beef sector now boasts thousands, with more joining every day.  Research conducted by Williams’ consulting firm shows the top 15 grass-fed branded beef programs in the United States are now harvesting more than 150,000 head of cattle annually. In addition, for the past 12 years the annual growth rate of the sector has been 25 to 30 percent annually.

The Betrayed: On Warriors, Cowboys and Other Misfits“That’s a pretty staggering growth rate over that time period considering that we had a pretty steep recession starting in ’08 running through ’09, ’10, and ’11,” says Williams. “And yet, grass-fed beef sales never checked up and continued to grow at that rate and are continuing to do so now.”

The Essence of Liberty: Volume I: Liberty and History: The Rise and Fall of the Noble Experiment with Constitutionally Limited Government (Liberty and ... Limited Government) (Volume 1)  The Essence of Liberty: Volume II: The Economics of Liberty (Volume 2) The Essence of Liberty: Volume III: A Universal Philosophy of Political Economy (Liberty: A Universal Political Ethic) (Volume 3) The reason for this steady growth, according to Williams, is consumer demand. Marilyn Noble, communications director of the American Grassfed Association (AGA) agrees, adding a growing number of people are becoming more aware of where their food comes from. The American Grassfed Association was started in 2003 by producers to develop a grass-fed marketing claim for the industry.

“They want to buy food from farmers they know,” says Noble, “and, it is really easy to get to know grass-fed producers.”

Some involved in the cattle industry may argue that grass-fed beef is a competitor to conventional grain-fed beef, but Williams says this is not the case.  Instead, grass-fed producers are expanding the total beef market share.

“Consumers who are buying grass-fed beef are either not buying grain-fed beef at all, or they are not buying it in any significant quantities,” says Williams. “The people that are buying grass-fed beef are buying it because that’s what they want and if grass-fed isn’t available they are not going to buy beef – period – or buy much less of it.”

In addition to its increasing market share, Williams says, grass-fed beef is also up against some challenges. Similar to grain-fed beef producers, a decreasing national cow inventory and higher prices for animals are serious issues.

“Our national cowherd has declined significantly over the last ten years, especially the last five,” says Williams, “so everybody in the beef industry, whether you are producing grain-fed, organic, natural or grass-fed, doesn’t matter, because we are all competing for the same shrinking pool of cattle.”

With this smaller national herd inventory comes higher prices. Which at some point, Williams says, will have producers asking, “How do we continue to pay a higher price for these animals and yet have a price point for the consumer they are not going to bulk at?”

Unless the industry can grow cattle numbers significantly over the next four to five years, Williams believes price pushback could result and consumers would opt to purchase less expensive meats.

Within the grass-fed sector specifically, Williams notes, there is a bottleneck of forage finishers. These are people with advanced pasture management knowledge and skill to put a high degree of finish on cattle.

Not just any producer can finish cattle on forage, Williams explains, “Because finishing is an entirely different paradigm than maintaining cows and producing calves or even grazing stocker steers.”

A high degree of finish ensures an enjoyable eating experience and the consistent uniform quality that Williams says is required when selling to consumers.

Similar to the lack of skilled forage finishers, a shortage of “processors of the middle” continues to challenge growing grass-fed beef brands. These processors rely more on harvesting for custom branded programs to make their living.

“There are not a lot of those left in the country because we have to harvest in load lots,” says Williams. “A local small plant can’t handle that.”

Average processing costs for very small processors, according to Williams, can range from $400 to $500 per head, while large plants owned by companies like Cargill, JBS or Tyson can slaughter, fabricate and breakdown carcasses into primal and subprimals for as low as $75 a head. The sweet spot grass-fed producers need processing costs to be for them to be profitable, he says, is in the $125 to $200 per head range.

Despite these challenges, Williams believes the future looks very bright for grass-fed beef. He notes at the 2013 Grass Fed Exchange Conference in Bismarck, North Dakota, Bill Helming, former National Cattlemen’s Beef Association chief economist and CattleFax founder, made the prediction that within the next ten years grass-fed beef would make up at least 30 percent of all domestic beef produced.

Additionally, Don Close, vice president of Rabobank, a global agricultural financier, made very similar forecasts in a recent economic analysis.

“Two of the key financial and economic gurus in the beef industry both made very, very similar statements,” says Williams. “Based on what I see being very heavily involved in this industry, I must agree with them.”

Noble says American Grassfed Association’s perspective on the industry’s future is similar, with growth projected from continued consumer interest, along with an increase in producers viewing grass-fed as a viable alternative enterprise for their operations.

Through the continued growth and challenges that lie ahead for grass-fed producers, access to high quality pasture forage and the right tools to properly graze it will be vital to their ability to raise the consistent, high-quality beef expected by today’s consumer. Gallagher North America will be there, as they always have, to support these producers with the highest quality of fencing products and livestock management tools available to help them get the job done.

Authored by Jesse Bussard a agricultural writer based in Bozeman, Montana.

Environmental & Natural Resource Economics: The Austrian View

edited by

Dr Jimmy T (Gunny) LaBaume

Is now available in both PAPERBACK and Kindle

BookCoverImageMurray N. Rothbard was the father of what some call Radical Libertarianism or Anarcho-Capitalism which Hans-Hermann Hoppe described as “Rothbard’s unique contribution to the rediscovery of property and property rights as the common foundation of both economics and political philosophy, and the systematic reconstruction and conceptual integration of modern, marginalist economics and natural-law political philosophy into a unified moral science: libertarianism.”

This book applies the principles of this “unified moral science” to environmental and natural resource management issues.

The book started out life as an assigned reading list for a university level course entitled Environmental and Natural Resource Economics: The Austrian View.

As I began to prepare to teach the course, I quickly saw that there was a plethora of textbooks suitable for universal level courses dealing with environmental and natural resource economics. The only problem was that they were all based in mainstream neo-classical (or Keynesian) theory. I could find no single collection of material comprising a comprehensive treatment of environmental and natural resource economics based on Austrian Economic Theory.

However, I was able to find a large number of essays, monographs, papers delivered at professional meetings and published from a multitude of sources. This book is the result. It is composed of a collection of research reports and essays by reputable scientists, economists, and legal experts as well as private property and free market activists.

The book is organized into seven parts: I. Environmentalism: The New State Religion; II. The New State Religion Debunked; III. Introduction to Environmental and Natural Resource Economics; IV. Interventionism: Law and Regulation; V. Pollution and Recycling; VI. Property Rights: Planning, Zoning and Eminent Domain; and VII. Free Market Conservation. It also includes an elaborate Bibliography, References and Recommended Reading section including an extensive Annotated Bibliography of related and works on the subject.

The intellectual level of the individual works ranges from quite scholarly to informed editorial opinion.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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